IMF finds no fault with yuan weakness

IMF finds no fault with yuan weakness

The IMF is recommending that Beijing allow the yuan to fall further if the trade war escalates, according to the South China Morning Post.

They cited comments from Alfred Schipke, who is the IMF's senior resident representative to China. He spoke in Beijing yesterday.

"If there is a shock, the exchange rate ought to be part of the adjustment and should be allowed to depreciate. That is what exchange rates are for," Schipke said, adding that the exchange rate should be decided by market forces. "In principle let the market decide," he said.

China has been leaning against yuan weakness by setting the mid-point at levels below the market. The currency has fallen about 4% this month.

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The latest GDP report showed growth at a 2.0% annualized pace.